Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Investor Day (December 2002)
25 slides from Norsk Hydro Asa's investor day presentation, Dec 9, 2002
Slide 1: Capital Markets Day Hydro Aluminium
Capital Markets Day Hydro Aluminium Executive vice president Jon-Harald Nilsen Senior vice president Arvid Moss Oslo, December 9, 2002
Slide 2: What we said and what we have done
2 What we said and what we have done Focus areas 2002 Actions taken 2002 Successful integration of All formal structures in place VAW and Technal Realisation of significant Improvement and synergy short term improvement programs on track potentials Successful restructuring Porsgrunn primary closed o
Slide 3: Europe: Moderate growth
3 Europe: Moderate growth Est. European rolled products shipments Est. European extrusion shipments Annual Annual change change (%) 8 (%) 8 Hydro 6 6 Hydro 4 4 4,5 4,0 3,9 2 2 2,3 2,5 0,5 0 0 -2 -3,2 -2 -3,9 -4 -4 1995-2000 2001 2002E 2003E 1995-2000 2001 2002E 2003E Source: EAA 40591_h -12.2002- *3
Slide 4: US: Low growth, recovery expected in 2003
4 US: Low growth, recovery expected in 2003 Est. US rolled products shipments Est. US extrusion shipments Annual Annual change change (%) 4 (%) 8 4,0 2 2,9 4 1,6 4,5 0 4,6 0 0 Hydro -2 -4 -4 -8 -6 -12 -8 -8,9 -16 -21 -10 -20 -12 -24 1995-2000 2001 2002E 2003E 1995-2000 2001 2002E 2003E Source: CRU 4
Slide 5: China: Primary metal balance
5 China: Primary metal balance 1000 tonnes 7 000 Production 6 000 Consumption 5 000 4 000 The Chinese challenges: Alumina deficit 3 000 Energy deficit Distance to market 2 000 Small plants/Søderberg – environmental issues 1 000 Financing 0 98 99 00 01 02 03 04 05 06 07 08 09 10 19 19 20 20 20 20 20
Slide 6: Creating value in Hydro Aluminium
Creating value in Hydro Aluminium
Slide 7: Rapid acquisition and integration processes
7 Rapid acquisition and integration processes Industry examples: Time from Hydro Aluminium announcement to closing Days Broad experience and diversity in the management teams Hydro/ 67 VAW Hydro/ 86 Kept momentum in day-to-day business Technal Successful execution of value capturing Alcan/ 140 (440
Slide 8: Aluminium improvement program on track
8 Aluminium improvement program on track Workforce reduction Cost reductions Employees Magnesium Aluminium NOK million Magnesium Aluminium 1 800 3 000 1 600 2 500 1 400 1 200 2 000 1 000 1 500 800 600 1 000 400 500 200 0 0 YTD Q2 YTD Q3 Target 2002 Target 2003 YTD Q2 YTD Q3 Target 2002 Target 2003 T
Slide 9: Aluminium improvement program: Raised targets
9 Aluminium improvement program Raised targets Cost reductions NOK million 3 000 2 500 2 000 1 500 1 000 500 0 YTD Q2 YTD Q3 Target 2002 Target 2003 Target 2004 Magnesium Aluminium New cost reductions 40591_h -12.2002- *9 - Hydro Media
Slide 10: Primary Metal: Cost Curve Position 2001
10 Primary Metal: Cost Curve Position 2001 2 000 Elbewerk 1 800 Hamburg Høyanger Rheinwerk Årdal 1 600 Sunndal 2004 Søral Karmøy Slovalco Cost USD/tonne Kurri Kurri 2005:Total 0.7 1 400 Alouette million tonnes Tomago (Limited increase) Hydro 2005:Total 1.0 1 200 million tonnes (+0.3 mill tons) 1 000
Slide 11: Metal Products: Increased volume and lower cost in operations
11 Metal Products Increased volume and lower cost in operations 100= Cost & Production Rackwitz ~23 000 tonnes per year volume 1998 250 226 227 224 182 200 Production volume 150 (index 1998=100) 100 50 100 88 89 84 77 Nominal cash cost EUR/tonne 0 (index 1998=100, Energy normalized) 1998 1999 2000 2
Slide 12: Extrusions: Increased press productivity
12 Extrusions: Increased press productivity Extrusion Europe & South America Extrusion North-America Kg/hour (index,1986=100) Kg/hour (index, European 1986=100) Productivity in acquired Productivity in acquired 180 companies at acq. point 180 companies at acq. point HAEX average HALNA average 160 16
Slide 13: Rolled Products: Increased volume. Improved industry structure
13 Rolled Products: Increased volume. Improved industry structure Volume Estimated market shares 2001 1 000 tonnes per year 100% = 3.2 million tonnes per year 1 000 Other Alcoa 900 14 % 14 % Total 800 700 Pechiney 17 % 600 Alcan 500 27 % Corus 400 9% Hydro Auto Aluminium 300 Litho 19 % 200 100 Foil
Slide 14: Value chain priorities: The path going forward
Value chain priorities The path going forward
Slide 15: The new strategic platform
15 The new strategic platform More downstream …. .. and Primary Metal in new areas 1000 tonnes Before VAW After Hydro VAW Electrolysis Canada metal 790 590 Oceania 14 3 Extrusion Downstream 510 120 60 740 100% 83 Europe Europe Rolled In addition to Rolling, leap forward in two areas Technal: Quantum
Slide 16: A different business: Higher capital turn, more margin business
16 A different business: Higher capital turn, more margin business Sales / Gross Investments EBITDA / Sales 1,4 25 Alcoa Alcan 1,2 Pechiney Alcoa 20 Hydro 1 Alcan Pechiney Hydro 15 0,8 Percent 0,6 10 0,4 5 0,2 0 0 1997 1998 1999 2000 2001 '02 YT 1997 1998 1999 2000 2001 '02 YT Sept Sept Source: Annu
Slide 17: Key steps in Hydro Aluminium's strategy
17 Key steps in Hydro Aluminium’s strategy 1. Global upstream 2. Europe mid- and downstream 3. Outside Europe, mid- and downstream 4. Global automotive 40591_h -12.2002- *17 - Hydro Media
Slide 18: Hydro Aluminium: Improved smelter structure
18 Hydro Aluminium: Improved smelter structure Percent of annual production, 2001 Total production 1 384 3 538 2 033 946 1 152 1 850 696 tonnes per year 10 27 28 35 35 42 36 > 500 ktpy 78 250-500 ktpy 84 100-250 ktpy 56 24 62 49 51 0-100 ktpy 46 15 18 22 16 15 15 16 10 8 HAL HAL Alcoa Alcan Pechiney
Slide 19: The leading player in Europe
19 The leading player in Europe Key strengths Market shares Europe Metal (casthouse) Products Hydro 25 Unique business model High recognition in market Alcan Low cost to market Rolled Products Strong market positions in Hydro 19 specialized products High technology standard Alcan 50% partner in the
Slide 20: Key strengths
20 Key strengths ■ Innovative business solutions ■ Excellence in customer cooperation ■ Industry benchmark in operation of key technologies 40591_h -12.2002- *20 - Hydro Media
Slide 21: Priorities ahead
21 Priorities ahead ■ Deliver improvement programs and value capturing as planned ■ Further enhance value of HAL-VAW integration ■ Win market share based on strengths ■ Improve relative cost position for smelter system ■ Continue active portfolio management ■ Meet 10% CROGI target 2004 (normalized p
Slide 22: Additional information
Ty | | | Additional information | wisi & HYDRO
Slide 23: Norsk Hydro organization
23 Norsk Hydro organization Norsk Hydro (Corporate) Hydro Hydro Hydro Oil & Energy Aluminium Agri Strategy & Bus. Dev CFO HR Flexible Primary Metal Metal Products Rolled Products Automotive Extrusion North America packaging* (Oslo) (Oslo) (Cologne) (Cologne) (Lausanne) (Baltimore) (Bonn) Metal segme
Slide 24: HAL is now among the top three integrated aluminium companies
24 HAL is now among the top three integrated aluminium companies Global: Companies ranked by 2001 primary production 1000 tonnes 4 000 Primary 3599 3 500 Rolled products 3 000 Extrusion 2412 2459 2504 2 500 2043 2 000 1400 1 500 975 871 1 000 833 790 750 774 696 540 500 352 131 90 0 Alcoa Rusal Alca
Slide 25: Moderate growth in primary shipments - 6% drop in 2001
25 Moderate growth in primary shipments- 6 % drop in 2001 Change over previous year Primary Al. apparent consumption and IP Western World 15 % 10 % 5% 0% -5 % Weighted IP W.W Al shipments W.W. -10 % 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Updated: November 2002 Source: CRU,